This article illuminates the missed opportunity for emissions reduction that’s right under our noses — or, more accurately — under our feet. Using compelling examples of projects championed by philanthropic actors across the globe, Louis Wilss and Anneke Kirsch of Active Philanthropy pave the way for philanthropy to think more boldly about buildings as an integral part of climate funding.
Another sector clamouring for attention from climate funders? Yes. But this one — buildings — is foundational. Responsible for nearly a quarter of global greenhouse gas emissions, there is the undeniable truth that without addressing the built environment we won’t reach our emission goals. Beyond emissions it also touches on housing justice, energy poverty, public health and climate resilience.
And there is a lot of potential for philanthropy to step it up: although many funders have already recognised the building sector as a key part of the solution to the climate crisis, philanthropic support is still not matching the scale of the challenge. Of the 2% of philanthropic giving that goes towards climate action, less than 4% focuses on advancing climate-friendly buildings. But as always, it’s not just about crunching numbers—it’s about where and how philanthropy intervenes strategically to push for a mindset shift in the sector towards sustainability.
Why buildings matter to climate
It’s worth pointing out that the building sector is the largest consumer of material resources and energy of any sector, accounting for nearly a quarter of global greenhouse gas emissions. This is due to three key drivers of the sector’s resource intensity:
- the electricity demand of buildings, often met by fossil fuel power plants, for lighting, cooling and appliances;
- the on-site burning of fossil fuels, mainly gas, for heating and cooking;
- and the significant fossil energy required to extract and produce building materials such as cement and steel, as well as the chemical processes involved in their manufacturing.
Today, the sector is alarmingly off track to meet its 2050 decarbonisation targets. For instance, building decarbonisation in Europe falls short of the necessary pathway by 40%, which risks exceeding our overall carbon budget, the maximum amount of CO2 we can emit while still having a chance of limiting global warming.
What can philanthropy do?
While the challenge is complex, real solutions are already being implemented, thanks in part to strategic philanthropic investment. These two examples highlight how philanthropy can address the necessity for decarbonisation in the buildings sector:
Meeting needs with lower emissions
Most of the energy used in buildings is used to ensure comfortable conditions in terms of heating (space and water) or cooling. While heating is currently responsible for the largest share of emissions in energy use, cooling represents one of the most rapidly increasing energy demands in buildings. This trend is being driven by rising global temperatures and the increasing uptake of air conditioning, especially in regions where cooling is not a luxury, but a matter of survival. Consequently, there is an urgent need to spur innovation and scale up access to affordable, energy-efficient cooling appliances. The Global Cooling Prize, funded by the Jacobs Family Foundation, the Quadrature Climate Foundation and other philanthropic actors, encourages innovations in air conditioning with a low climate impact, addressing the urgent need for sustainable cooling technologies.
Another important lever to reducing the carbon intensity of the sector are projects that focus on the reduction of conventional materials like concrete and steel by advancing production methods, fostering low-carbon alternatives, and integrating carbon management technologies. The LC3 project is a great example of how material innovation can help with that, as it produces cement with 40% fewer emissions than conventional options, using a blend of limestone and calcined clay. As one of the project’s members, the Climate Works Foundation plays an important role in advancing LC3 by bringing together industry stakeholders to facilitate its broader adoption and embracing one of the most crucial roles of philanthropy as a convening power.
Beyond decarbonisation
Our ability to keep climate change within safe planetary boundaries will depend heavily on our collective efforts to drive a fundamental shift in the way buildings are designed, constructed and used. With growing populations and urbanisation, demand for housing will rise—yet each new structure locks in emissions for decades. So, the question is not just how we decarbonise what we build, but increasingly: what do we build, for whom, and how do we use what already exists? The following examples illustrate how philanthropy can fuel critical conversations and push the boundaries of innovation.
Rethinking the needs themselves
Philanthropy can help shift the debate from efficiency alone to an approach based on sufficiency. Sufficiency is a sustainability strategy that questions whether today’s extensive resource consumption is needed. Unlike efficiency, which seeks to optimise resource use, sufficiency aims to lower demand for resources at the source and to establish alternatives to consumption. In the building sector, sufficiency calls for a change in how buildings are planned, built, and utilised. Or in other words: “While efficiency is about doing things right, sufficiency is about doing the right things” (Sachs, 1999). Active Philanthropy’s Philanthropy Brief on Building Sufficiency delves into this topic in more detail.
Transforming the buildings sector means rethinking not only energy systems and materials, but also how we live (together) and share space. It’s a chance to tackle the climate and biodiversity crises while ensuring dignified living conditions for all. There are already some philanthropic initiatives out there that focus on how we can drive a more systemic change in the sector.
One approach is focusing on densification and reducing one’s spatial footprint. As cities expand, the demand for residential and commercial space rises. Rather than resorting to urban sprawl, a more sustainable approach is to maximise the use of existing urban land. Strategies include adding storeys to existing buildings or constructing annexes to extend housing units. These measures optimise the use of developed land, preserve green spaces, and minimise the environmental impacts associated with urban expansion. And, more importantly, it also can show us how we can live more fully with less space: The Holcim Foundation Award-winning Parasite House (‘Casa Parásito’) exemplifies how roof space can be creatively utilised for urban densification. By building a tiny house on a rooftop in the Ecuadorian capital Quito, the project questions traditional approaches to urban development. By shining a light on projects like this, philanthropy can play a key role in fostering more inclusive, space-efficient solutions.
Another great example of philanthropy tackling the question of how we use existing built environment is the “Empty Spaces to Homes” initiative by Habitat for Humanity, supported by Laudes Foundation. They repurpose vacant and forgotten buildings into affordable housing. With rising demand and thousands of unused spaces across Europe, the initiative targets low-income households. Its Empty Space Spotter app lets UK users document vacant properties, tackling two of the major hurdles for repurposing buildings: the lack of reliable data and limited awareness of their potential to alleviate the housing crisis.
You can find more details and other examples from philanthropy in our recently published immersive website Horizons for Funding Climate-Friendly Buildings.
One thing is clear: We cannot build our way out of the climate crisis with yesterday’s materials and mindsets. The buildings sector represents a huge change for philanthropy to utilise its resources and freedom to experiment, convene, and drive systems change, not only through new technologies but also by questioning how we live, what we value, and what kind of built environment supports a just and liveable future. Let’s stop treating buildings as a footnote in climate funding and start seeing them for what they are: foundational to planetary and social well-being.
Q3 2025 Climate Solutions Magazine
We encourage you to read this edition of the F20 Climate Solutions Magazine in full. The articles focus on the transformative potential that future-forward, bold policy can have.
Expand the preview below and immerse yourself in these thought-provoking articles.